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Archive for financial planners Perth

Have the Sharemarkets Bottomed Out Yet?

At Approved Financial Planners in Perth, we have more than 40 years’ combined experience in the financial industry. We also have the full resources of our parent company, AMP Capital. One of the best resources AMP Capital has made available to us is their Chief Economist and Head of their Investment Strategy Team, Dr Shane Oliver.

Financial Planners on Sharemarkets

Recently, Dr Oliver wrote an article on the AMP Capital company blog called, “Have we reached the bottom?” It is a concise analysis of our current economic situation and contained his projections for the near future. We would like to share some of his ideas with you.*

The Reserve Bank of Australia (RBA) left the interest rate on hold at 2.0% during their first meeting of 2016. Dr Oliver believes their reasoning to be “reasonably solid economic data within Australia” and “global economic turmoil.” He also projects another rate cut of 0.25% to provide more relief for the Australian economy.*

How Oil Prices Affect Our Economy

Within the past two years, oil prices have dropped between 70-80%. Since we are a “net energy exporter,” many of our gas export contracts will go out at lower prices. This will create less tax revenues for the Federal Government. However, current prices are helping Australian households save an average of approximately $700 per year on petrol.*

Outlook for 2016

Dr Oliver believes it is “too early to say that we have reached the bottom for shares.” He also believes that a poor performance in January does not mean that the entire year will be poor and that the chances of a poor 2016 overall are “30-40%.” He expects it to “take a while for central banks to spring into action.” The end result is a projection of short-term volatility with a rising trend at the end of 2016.*

Call Approved Financial Planners in Perth Today

To learn more or for an obligation-free individual consult, call us today: 1300 787 274.

*AMP Capital, 19 February 2016. Dr Shane Oliver: “Have we reached the bottom?”

Understanding Superannuation

One of the many financial services we offer at Approved Financial Planners is help with your superannuation fund. Whether you choose self managed superannuation or any of the super funds available to you, we can provide sound financial advice.

How Superannuation Works

Understanding Superannuation in Australia

Money is placed into your superannuation account, also known as a “super account” or “super,” by you, your employer or both. The money in your super fund is then invested with the intent of it growing in time, even though it will occasionally return a negative result for the year. *

As a super grows, the money that was earned is reinvested and also earns a return; this helps your balance grow even more. On member contributions for which you claimed a tax deduction or on contributions from your employer, your tax is only 15% of any contribution up to $30,000 per year. The $30,000 limit is known as “concessional contributions cap.” *

If you are 50 years of age or older, your “cap number” is $35,000 per year. If a combination of certain contributions and your income is greater than $300,000 per year, you will be taxed at a rate of 30% on all contributions that are over the cap. *

This money is held for you until you die, retire or reach a certain age. Depending on your date of birth, this age is between 55 and 60 years old. Your benefit is then paid in either a lump sum or an income stream. *

Choosing Your Super Fund

Most Australians have the option of choosing their own superannuation fund. If you shift jobs, you can often take your super fund to your new place of employment. AMP Capital recommends checking with your new employer’s human resources or payroll department.

We Can Help You

If you would like to learn more about your super fund, call Approved Financial Planners on 08 6462 0888 today. We have a wealth of experience in helping people like you maximise their supers and their retirements.

*AMP Capital. Understanding Super. Make your super work harder for you.

Planning an Education for Your Children

One of the many services our financial planners provide to our clientele in the Perth area is planning an education for their children. We know that everyone wants to provide for their children and an education is at the top of the list for a lot of parents. According to the Financial Planning Association of Australia (FPA), though, some families may be better off not trying to put the money aside because it could make them become a burden to their children later in life.*

Education Plan For Kids With Financial Planners

The FPA strongly suggests getting your own finances and lifestyle in order before deciding whether or not to put money away for your children’s education. If you can, though, here are some options suggested by the FPA that can help you save for your children’s education.*

Pay Down Your Mortgage Faster

The FPA suggests that you would be well-served to focus on paying down your mortgage as soon as you possibly can. One strategy includes finding the lowest rates and using a redraw facility to pay for college expenses.*

Investment Portfolio

For those who are younger, creating a diversified investment portfolio with exchange traded funds can be an efficient way to produce income. If the portfolio is in the name of the parent with the lowest income, it can help minimise taxes.*

Insurance Bonds

If you are in a higher tax bracket or you have at least ten years to save, insurance bonds can be efficient. They don’t impact personal taxes and your contributions are flexible within limits. If you need to access any or all of the funds before the bonds reach maturity, you can. However, a tax of 30% is levied within the bond. *

Your Super

If you make additional concessional or personal contributions to your super, they are taxed at 15% but can still increase your savings. However, you can’t get to your money until retirement. The good side of this strategy: you may take care of your retirement early enough to free up funds by the time your children are old enough for college.*

Call Approved Financial Planners Today

To learn more, call us today: 08 6462 0888.

*Financial Planning Association of Australia, “Top tips for planning your kids’ education,” 16th September 2015. https://fpa.com.au/blog/top-tips-for-planning-for-your-kids-education/

Do You Need Steady Capital or Sustainable Income?

As providers of a wide range of financial services in Perth, we have helped a lot of your neighbours achieve their financial goals. However, there is no such thing as a “one size fits all” investment because everyone’s individual situation is different.

Steady Capital or Sustainable Income

One of the basic questions we like to ask our clients is whether they are looking for steady capital or sustainable income. Recently, our parent company, AMP Capital, addressed the effects of the low cash interest rate on cash investments. While a low cash interest rate is good for the economy, it tends to reduce the value of cash investments such as term deposits.*

As you probably know, the cash interest rate is still at a record 2.0%. For comparison, it was at 7.25% in August 2008 and 4.75% in November 2011. *

Cash Investments

Term deposits and other cash investments have traditionally been regarded as “safe” investments because the value of those investments is usually stable. Historically, interest rates have been enough, even when in a “low” cycle, to provide adequate return on investment (ROI). However, interest rates are now at record low levels.*

Consequently, cash investments are now providing returns that are barely more than the current inflation rate. In other words, they provide steady capital for the short term, but not sustainable income over the long term. *

Investment Portfolios

Investment portfolios that are diverse and well-managed, containing infrastructure, properties, equities and corporate bonds, are now able to provide an income stream that is reasonably predictable and attractive to investors.*

However, investors have to understand that portfolios such as those mentioned above are subject to short-term volatility.*

Call Approved Financial Planners Today

Everyone’s financial situation is different. The information we provided in this piece is good general information. However, we can’t give individual financial advice until we talk to you about your individual finances. To learn more, call 08 6462 0888 today.

*AMP Capital, “Is sustainable income or steady capital your goal in a low interest rate environment?”
https://www.ampcapital.com.au/article-detail?alias=/site-assets/articles/media-releases/2015/2015-05/is-sustainable-income-or-steady-capital-your-goal

Setting up an SMSF? Watch Out for These Pitfalls.

A lot of Australians are opting out of their employer’s superannuation funds and setting up self managed superannuation funds (SMSF’s). At Approved Financial Planners, we have helped numerous people in the Perth area with their SMSF’s.

According to the Financial Planning Association (FPA), though, some costly mistakes are common among those establishing SMSF’s. Here are a few of them.

Letting Your Money Sit

Some Australians who opt for SMSF’s put their money into them but just let it sit as cash. The FPA stresses the importance of those who establish an SMSF having a plan and a strategy for how their funds are going to be invested.*

Pitfalls For Setting up an SMSF

Inaccurate Assessment of Costs

It can cost a lot of money initially to set up an SMSF. Then there are ongoing costs, such as investment fees, legal advice and ongoing accounting. If there is a corporate trustee, it will cost money to maintain the trustee structure.*

Every financial transaction or investment associated with the fund may have a fee or multiple fees. If you choose to invest your SMSF in rental property, for example, you will have to pay stamp tax duty, maintenance, property management and a host of other costs. Accurate assessment of costs for any investment is important.*

Underestimating the Time and Knowledge it Takes to Run an SMSF

According to the FPA, the most important facets are ongoing research or due diligence, investment management and tax returns. These must be done by you or you must hire a team to run your investments for you.

Call Approved Financial Planners Today

At Approved Financial Planners, we offer full self managed superannuation fund services. To learn more or for an obligation-free consult, call us today: 08 6462 0888.

*Financial Planning Association of Australia: “Common mistakes people make when setting up their SMSF’s.”
https://fpa.com.au/blog/common-mistakes-people-make-when-setting-up-their-smsf/

How the Right Financial Planner can Balance Your Present Lifestyle with Your Future

In Perth, financial planners have an important job to do. We have to help you live the kind of lifestyle you want now while helping you plan for your future. Most people want to live well now, but they want to have enough money to live well in the future, too. We understand that and are experts at helping you strike that balance.

Financial Planners Help Balance Present and Future Lifestyle

We know that everyone has different “drivers” in their lives. Some like to take vacations. Some like to play golf. Some like to fish or boat. Some like knowing that their children’s college education will be taken care of for them. Some place the most importance in the house they live in.

In Perth, it can be quite expensive to do many of these things. That makes it even more beneficial for people to maximise every dollar they earn, both in the present and the future.

How We Help You Meet Your Goals

At Approved Financial Planners, it all starts with your goals. When you talk to one of our financial planners, we can start with your goals. Then, we find out your resources, such as assets and income. We also take your monthly expenses into consideration. Your superannuation fund is also important. Some people decide to use a self managed superannuation fund and make extra contributions through the fund.

Whatever your situation, assess your goals, assets and expenses. Then we help you figure out when you want to retire and how much money you want to make when you retire. Once you have a firm retirement date and a figure, it’s simply a matter of making and executing a financial plan that is customised for your needs.

We can also provide advice for you right now on budgeting and getting the most out of your income. For most clients, we are able to strike that balance between having the “now” and the future they want.

Consult Our Financial Planners

To learn more or for an obligation-free consult, call us today: 08 6462 0888.

Defined Benefit Super Scheme? Why a Super Checkup May Be Beneficial.

Many Government or public sector employees have PSS defined benefit superannuation funds. We would like to explain the difference between an accumulation-style superannuation fund, a defined benefit superannuation fund and a self managed superannuation fund.

When you retire, especially if you plan to stick around the Perth area, you don’t know how much money you will need to live the lifestyle you want. We feel it is helpful for those with defined benefit supers to understand their options.

Defined Benefit Super Scheme

What is a PSS Defined Benefit Super Fund?

A PSS defined benefit super is so named because the benefits you receive upon retirement will be “defined” or based upon final average salary (FAS), your contribution rate and the amount of time you were a PSS member. The Australian Government and other participating employers offer this kind of super fund.*

Why is it Different

Other super funds are invested for you. You can either gain money or lose money. The amount of money you eventually collect is dependent upon how much money is in your super fund. When you retire, you can collect your super as a monthly payment (retirement income stream), a lump sum or a combination of both.**

How a “Super Checkup” Could be Beneficial

There are many choices and options for you. We would be happy to have one of our financial advisors examine your situation and explain your options. You may want to keep your money in your current fund. You may want to invest it in another fund. You may want to invest it in a self managed superannuation fund.

We have a wealth of experience in helping people in Perth maximise their supers. To learn more or for an obligation-free consult, call Approved Financial Planners today: 08 6462 0888.


*Australian Government, “How PSS Works,” https://www.pss.gov.au/your-scheme/how-pss-works/#.VeVHHflViko

** Australian Securities and Investments Commission: How Super Works
https://www.moneysmart.gov.au/superannuation-and-retirement/how-super-works

Important Factors for Investing in Retirement

Retirement planning can be tricky if you don’t know what you’re doing. Fortunately, we have helped numerous people in the Perth area get started on the path to a prosperous retirement. At Approved Financial Planners, we have a wealth of local experience, combined with the resources of AMP Financial.

While we are not allowed to give any specific advice on this blog due to the disparity in individual financial situations, we would like to provide you with some general information that both we and AMP feel is important when making investment decisions.

Factors for Investing in Retirement

Why Retirement Planning is Important

For many in the previous generation, an age pension was enough to provide a comfortable retirement. However, the Australian Government is now encouraging everyone to take control and save for their own retirement.*

As more baby boomers reach retirement age, the number of people drawing pensions will soon be too large for the current workforce to sustainably support them. Consequently, Australians are being encouraged to create their own sources of income to supplement their age pensions and ensure a comfortable lifestyle after retirement.*

Here are some factors to consider when planning your retirement.*

What Do You Absolutely Need?

This is the money needed to eat, keep a home, pay the bills and transport yourself from point A to point B. This should be a steady income stream that won’t be adversely affected by inflation.*

Discretionary Spending

You don’t want to work hard, retire and then have nothing left to enjoy your life. How much money do you need to live the lifestyle you want? This can include recreation, hobbies, travel and entertainment. Do you want a family room with a large TV for entertaining? A new car? A boat? This portion is often addressed by assets that grow over time.

Call Approved Financial Planners

It will take intelligent financial planning to maximise your retirement in the Perth area. Call Approved Financial Planners today for a free consult: 08 6462 0888.*

*AMP Capital: 7 April 2015: “Investing for Retirement: 6 Things to Consider.”

Tips for Creating Passive Income Streams

Investment planning can be confusing and scary. It is one of the services we offer in our Perth office. When investment planning is done right, your money can make money for you. We cannot offer specific information over a blog; you will have to contact our office in Perth for a consult if you would like specific advice. However, we can provide some general tips to get you pointed in the right direction.

Creating Passive Income Streams

Do You Have Goals Yet?

Our parent company, AMP Financial, has a lot of good information on their website, https://www.amp.com.au/. On their page entitled “Understanding Investments,” they recommend that you formulate short term, medium term and long term goals. Short term is defined as in the next six months to two years. Medium term is the next two to five years. Long term is anything further down the road than five years.

Choosing the Correct Investment Vehicle

On AMP’s webpage called “Choosing the right investment option,” they explain how to decide which forms of investments are right for you. The first factor to take into consideration is your risk tolerance. This is determined by combining your attitude towards risk with the amount of time you have to invest.

Generally, the higher the potential return, the higher the risk. However, that isn’t always the case and our financial planners are experts at finding investments that have above-average risk to reward ratios. Here are some risk-reward factors of popular investments.

If you “invest” in a savings account or term deposit, the risk is extremely low, but the returns are also low. Fixed income investments such as bonds or debentures are low risk, but can provide average returns if they are linked to the rate of inflation.

Equities or shares are seen as very high risk and volatile. They can, however, provide high rates of return.

Call Approved Financial Planners Today

To learn more, call our office in Perth: 08 6462 0888.

Why It’s Never Too Early to Start Thinking about Estate Planning

Many Australians think “estate planning” means drawing up a will and forgetting about it. While the first step in estate planning is, indeed, to draw up a will, there are a lot more things you can do to ensure a smooth transition and allow your heirs to keep more of their money. While we aren’t allowed to give individual advice on our blog and all information must be general in nature, here are some of the strategies we have suggested to various clients in our Perth office.

Start Thinking about Estate Planning

The Will

At Approved Financial Planners, we don’t create wills. However, we do provide referrals to trusted members of the legal profession who are qualified to make sure your assets go to whom you want, while taking full advantage of tax effective and innovative strategies. The will is the linchpin of your succession strategy.

Transfer of Assets

Some clients choose to start transferring assets while they are still alive. This can often have tax advantages and can help your heirs utilise the assets at an earlier age. For example, passing on a business can allow the heirs to run it more successfully while allowing you to forget about it and enjoy retirement.

Vital Estate Planning Factors

It is important to know all of your assets when planning your estate. This can include personal assets and investment assets, such as discretionary trusts, investment companies and self managed superannuation funds (SMSF’s).

Another important consideration is minimising taxes. This can include the creation of investment vehicles that provide long-term tax efficiency.

Many families have at least one “special situation” such as divorce, disabled beneficiaries or minor beneficiaries. These assets are usually protected on an individual basis depending upon the situation. Future death benefits also require attention in many cases to make them tax effective.

Call Approved Financial Planners in Perth Today

If you would like specific information, call us today for a free consult: 08 6462 0888.